Under what conditions can Churchs Chicken reduce or modify the Protected Area of a franchisee?

According to Churchs Chicken's 2025 Franchise Disclosure Document, Churchs Chicken has the right to reduce or modify a franchisee's Protected Area under specific conditions. The Franchise Agreement grants a Protected Area, within which Churchs Chicken will not open or license another to open a Churchs Restaurant during the term of the agreement. This area is typically the lesser of a 2-mile radius from the restaurant or an area encompassing a population of 50,000 people, excluding existing restaurants, alternative venue locations like transportation facilities, stadiums, schools, and shopping malls.

Churchs Chicken may reduce or modify the Protected Area at any time during the Franchise Agreement's term. The modified area will encompass the geographic area immediately surrounding the Restaurant with a population of no less than 50,000 people. This modification becomes effective upon the franchisee's receipt of written notice from Churchs Chicken.

This provision means that while a franchisee initially receives a Protected Area, Churchs Chicken retains the right to adjust it based on population criteria. This could impact the franchisee's competitive advantage if the Protected Area is reduced, potentially allowing Churchs Chicken to establish or license another restaurant closer to the franchisee's location. Prospective franchisees should carefully consider this clause and its potential impact on their business before entering into a Franchise Agreement with Churchs Chicken.